The second calendar quarter, Apple’s fiscal Q3, seems sure to be the low point for many company’s earnings. Accordingly, investors are already turning their attention to next year where the consensus view has S&P 500 earnings jumping from $125 this year to $161 next year, matching 2019 earnings.
Earnings season is here, and it looks like a nail-biter. Will stocks rise because of a.) better-than-expected results; b.) disappointing results but bright guidance; or c.) lousy results and guidance, raising the chances of more policy support for stocks? Talk about high uncertainty.
The consensus view has second-quarter earnings per share underlying the S&P 500 index plunging 44% versus a year ago to just over $23. Many companies have stopped issuing guidance, which one investment bank calls an “information blackout” and others say is like “flying blind.”
Investors [generally have] high uncertainty surrounding everything about stocks except for the only thing that seems lately to matter: rates. The Federal Reserve has said it expects to leave them near zero until at least 2022. Even elevated share prices compare well with assets paying almost nothing. That won’t keep the market rising forever, but for now, it suggests shareholders on a blind flight through earnings season should stay the course.
MacDailyNews Take: Pretty much everything about 2020 so far makes us want to turn our attention to next year.